Biotech stocks were, and still are, some of the market’s best-performing stocks over the past year. But waves of selling in recent weeks hit these stocks hard, with big price swings in heavily traded ETFs including the $4.9 billion iShares Nasdaq Biotechnology ETF (IBB). In March, the ETF has dropped 11%, despite a 2.5% advance today.

“The recent sell-off in high growth industries has been ETF driven, as mutual funds have been net buyers over the last several weeks,” said Savita Subramanian, head of U.S. equity and quantitative strategy at Bank of America Merrill Lynch.

She points to three straight weeks of outflows from biotech ETFs, culminating in $1 billion of withdrawals in the week ended March 26. By comparison, traditional biotechnology stock mutual funds have taken in money for four straight weeks, though they were nearly flat in the most recent week, taking in a paltry $3 million.

What’s more, investors still hold large positions in biotech and Internet stocks, she says, and itchy trigger fingers are likely to prompt further declines.

“Given that Biotech and Internet carry 60% and 50% overweights in active managers’ portfolios, respectively, we may see more selling pressure in these pockets of the market,” she says.

However, Ms. Subramanian dismisses the argument that recent gains in biotech stocks signals a frothy stock market: Biotech stocks are up roughly 300% over the past five years.

“Equity bubbles rarely happen when everybody is talking about bubbles, and equity sentiment remains subdued, unlike the bullish levels of 2000,” she says.